‘Politically toxic’ holiday tax could turn voters against Labour, hospitality leaders warn
The “politically toxic” holiday tax could turn hordes of voters against Labour if it is pushed through, hospitality leaders have warned the government.
The proposed tax could threaten the fragile majorities of a host of Labour big beasts including health secretary Wes Streeting and foreign secretary Yvette Cooper, trade body UK Hospitality (UKH) has claimed.
Legislation for the holiday tax is set to be included in the King’s Speech later this month, and it would be left up to regional mayors to trigger the levy in their areas.
It had been suggested the tax could be charged either at £2 per person per night or a five per cent rate, but is understood mayors will be allowed to decide how to charge the levy in their areas.
More than half (54 per cent) of Brits oppose a tax on holidays, compared to 24 per cent who support it, according to UK Hospitality’s poll of more than 10,000 people.
UKH says the levy would hit working families the hardest and could add more than £100 to the cost of a two-week break.
One in five (18 per cent) of Brits would be put off booking a holiday by any level of tax, according to the polling, while 57 per cent would cancel trips if the levy added £50 to their bill.
UK Hospitality had previously warned the tax could “decimate” the country’s holiday economy, to the tune of 33,000 lost jobs and more than £2bn wiped off of GDP.
Streeting could face backlash
The levy has the potential to incur a huge wave of anger against Labour at the next election, UKH’s polling has found.
Voters are more than 10 times more likely to vote against MPs who support the holiday tax than they are to back their representatives for defending it, according to the survey.
According to modelling of Labour voters’ attitudes towards the tax in each constituency, the number of Brits who oppose the levy eclipses the majority held by a number of cabinet members.
Foreign secretary Yvette Cooper, environment secretary Emma Reynolds and education secretary Bridget Phillipson could lose their seats in direct retaliation against the tax, UKH found.
In each of these constituencies, the number of Brits who voted Labour in 2024 but are less likely to re-elect the party because of the tax is larger than these MPs’ majorities.
In Ilford North, the constituency of health secretary Wes Streeting, 5,864 former Labour voters would be less likely to re-elect Labour because of the tax – dwarfing his 528-person majority.
‘Wake-up call’ for Labour
Allen Simpson, UK Hospitality’s chief executive, said: “This polling should be a wake-up call for every MP tempted to back the holiday tax.
“It is opposed by a majority of their constituents, it would deter millions from holidaying in England, and it would hit hardest the very families the government says it wants to help.”
Simpson suggested the government has been pressured into the “politically toxic” tax by Labour mayors, saying: “It would be very hard to find someone [in government] who thinks this is a good idea.”
While Labour mayors like Andy Burnham and Sadiq Khan have backed the levy, others like Reform UK’s Lincolnshire mayor Andrea Jenkyns and Tory mayor for Tees Valley, Lord Houchen, have said they would not impose the tax.
Mel Stride, Conservative shadow chancellor, dubbed the holiday tax as “not fair” and “completely out of touch”.
“Reeves’ holiday tax is an attack on family breaks and a blow to our seaside towns, piling more pressure on struggling hotels, B&Bs and local jobs.
“At a time when every penny counts, Labour are making holidays in Britain more expensive. This Labour government doesn’t understand business,” Stride said.
Robert Jenrick, Reform UK’s Treasury spokesperson, confirmed his party’s mayors will refuse to charge the tax.
He said: “There appears to be nothing that Labour won’t tax. This will be the death knell for many seaside resorts and will stop up to one in five Brits holidaying in England.
“We want people to be able to have fun and enjoy themselves without being clobbered by the taxman. This latest ploy from Labour shows they have completely giving up on serving hard-pressed people.”
Butlins boss calls out tax
Simpson said it would be “naive” for the government to give mayors the option to impose the tax and expect them not to implement it.
The boss of seaside resort company Butlins said he opposes the tax, which he claims “takes away people’s chance of a holiday”.
Chief executive Jon Hendry Pickup said: “For many families, a holiday tax won’t mean choosing a different type of break – it will mean not going on holiday at all.
“The numbers here are stark and in an already price-sensitive market, even small increases can be the tipping point between booking and staying at home.”
A spokesperson for the ministry of housing, communities and local government said: “This poll is based on speculation. The final design of the visitor levy has not been decided.
“We’re clear that the levy will ensure areas benefit even more from tourism and Mayors will have more money to invest in local priorities.”